IDEAS home Printed from https://ideas.repec.org/p/ten/wpaper/2015-04.html
   My bibliography  Save this paper

Not Whether, but Where? Pell Grants and College Choices

Author

Listed:

Abstract

Pell grants are the largest financial aid vehicle in the United States, and yet, their role in shaping students' college choices is not clear. Drawing on the enrollment decisions of four cohorts of Tennessee high school graduates and discontinuities in Pell eligibility as a function of federal formulae, we find little evidence that marginal Pell eligibility affects whether or where students enroll in college. Inframarginal estimates suggest that students sort into colleges with 12 - 14 cents higher tuition per dollar of Pell aid, although other measures of college quality do not significantly improve over the counterfactual.

Suggested Citation

  • Celeste K. Carruthers & Jilleah G. Welch, 2015. "Not Whether, but Where? Pell Grants and College Choices," Working Papers 2015-04, University of Tennessee, Department of Economics, revised 28 Sep 2015.
    • Handle: RePEc:ten:wpaper:2015-04
    as

    Download full text from publisher

    File URL: http://web.utk.edu/~ccarrut1/CarruthersWelch_SEPT2015.pdf
    File Function: First version, 2015
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Neil S. Seftor & NSarah E. Turner, 2002. "Back to School: Federal Student Aid Policy and Adult College Enrollment," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 336-352.
    2. Thomas J. Kane, 1995. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?," NBER Working Papers 5164, National Bureau of Economic Research, Inc.
    3. David E. Card & David S. Lee & Zhuan Pei & Andrea Weber, 2012. "Nonlinear Policy Rules and the Identification and Estimation of Causal Effects in a Generalized Regression Kink Design," NRN working papers 2012-14, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    4. Sarah R. Cohodes & Joshua S. Goodman, 2014. "Merit Aid, College Quality, and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 251-285, October.
    5. Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 271-296.
    6. Stacy Dale & Alan B. Krueger, "undated". "Estimating the Return to College Selectivity Over the Career Using Administrative Earning Data," Mathematica Policy Research Reports d76ec29a0bbb4b1bb9d285b5a, Mathematica Policy Research.
    7. Michael F. Lovenheim & C. Lockwood Reynolds, 2013. "The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom," Journal of Human Resources, University of Wisconsin Press, vol. 48(1), pages 1-35.
    8. Susan M. Dynarski & Judith E. Scott-Clayton, 2008. "Complexity and Targeting in Federal Student Aid: A Quantitative Analysis," NBER Chapters, in: Tax Policy and the Economy, Volume 22, pages 109-150, National Bureau of Economic Research, Inc.
    9. repec:mpr:mprres:6922 is not listed on IDEAS
    10. Dynarski, Susan & Wiederspan, Mark, 2012. "Student Aid Simplification: Looking Back and Looking Ahead," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 211-234, March.
    11. Lockwood Reynolds, C., 2012. "Where to attend? Estimating the effects of beginning college at a two-year institution," Economics of Education Review, Elsevier, vol. 31(4), pages 345-362.
    12. Phillip B. Levine & David J. Zimmerman, 2010. "Introduction to "Targeting Investments in Children: Fighting Poverty When Resources are Limited"," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources Are Limited, pages 3-11, National Bureau of Economic Research, Inc.
    13. Christopher Avery & Caroline Minter Hoxby, 2004. "Do and Should Financial Aid Packages Affect Students' College Choices?," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 239-302, National Bureau of Economic Research, Inc.
    14. Dynarski, Susan M. & Scott–Clayton, Judith E., 2006. "The Cost of Complexity in Federal Student Aid: Lessons From Optimal Tax Theory and Behavioral Economics," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(2), pages 319-356, June.
    15. repec:mpr:mprres:3250 is not listed on IDEAS
    16. Levine, Phillip B. & Zimmerman, David J. (ed.), 2010. "Targeting Investments in Children," National Bureau of Economic Research Books, University of Chicago Press, number 9780226475813.
    17. Goodman, Joshua, 2008. "Who merits financial aid?: Massachusetts' Adams Scholarship," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2121-2131, October.
    18. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 933-959.
    19. Eric Bettinger, 2004. "How Financial Aid Affects Persistence," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 207-238, National Bureau of Economic Research, Inc.
    20. Patrick Kline, 2011. "Oaxaca-Blinder as a Reweighting Estimator," American Economic Review, American Economic Association, vol. 101(3), pages 532-537, May.
    21. Caroline M. Hoxby, 2004. "College Choices: The Economics of Where to Go, When to Go, and How to Pay For It," NBER Books, National Bureau of Economic Research, Inc, number hoxb04-1.
    22. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
    23. Brian Jacob & Brian McCall & Kevin Stange, 2018. "College as Country Club: Do Colleges Cater to Students’ Preferences for Consumption?," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 309-348.
    24. repec:pri:indrel:dsp01gf06g265z is not listed on IDEAS
    25. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    26. Bruce, Donald J. & Carruthers, Celeste K., 2014. "Jackpot? The impact of lottery scholarships on enrollment in Tennessee," Journal of Urban Economics, Elsevier, vol. 81(C), pages 30-44.
    27. Joshua Goodman & Michael Hurwitz & Jonathan Smith, "undated". "Access to Four-Year Public Colleges and Degree Completion," Working Paper 175226, Harvard University OpenScholar.
    28. Susan Dynarski & Judith Scott-Clayton & Mark Wiederspan, 2013. "Simplifying Tax Incentives and Aid for College: Progress and Prospects," Tax Policy and the Economy, University of Chicago Press, vol. 27(1), pages 161-202.
    29. Goodman, Joshua & Hurwitz, Michael & Smith, Jonathan, 2015. "College Access, Initial College Choice and Degree Completion," Working Paper Series rwp14-030, Harvard University, John F. Kennedy School of Government.
    30. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    31. Eric P. Bettinger & Bridget Terry Long & Philip Oreopoulos & Lisa Sanbonmatsu, 2012. "The Role of Application Assistance and Information in College Decisions: Results from the H&R Block Fafsa Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1205-1242.
    32. Caroline Minter Hoxby, 2004. "Introduction to "College Choices: The Economics of Where to Go, When to Go, and How to Pay For It"," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 1-12, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benjamin M. Marx & Lesley J. Turner, 2015. "Borrowing Trouble? Student Loans, the Cost of Borrowing, and Implications for the Effectiveness of Need-Based Grant Aid," NBER Working Papers 20850, National Bureau of Economic Research, Inc.
    2. Jeffrey T. Denning & Benjamin M. Marx & Lesley J. Turner, 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 193-224, July.
    3. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    4. Michael S. Kofoed, 2017. "To Apply or Not to Apply: FAFSA Completion and Financial Aid Gaps," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 1-39, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carruthers, Celeste K. & Welch, Jilleah G., 2019. "Not whether, but where? Pell grants and college choices," Journal of Public Economics, Elsevier, vol. 172(C), pages 1-19.
    2. Bruce, Donald J. & Carruthers, Celeste K., 2014. "Jackpot? The impact of lottery scholarships on enrollment in Tennessee," Journal of Urban Economics, Elsevier, vol. 81(C), pages 30-44.
    3. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    4. Lindsay C. Page & Judith Scott-Clayton, 2015. "Improving College Access in the United States: Barriers and Policy Responses," NBER Working Papers 21781, National Bureau of Economic Research, Inc.
    5. Jeffrey T. Denning & Benjamin M. Marx & Lesley J. Turner, 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 193-224, July.
    6. Carruthers, Celeste K. & Fox, William F., 2016. "Aid for all: College coaching, financial aid, and post-secondary persistence in Tennessee," Economics of Education Review, Elsevier, vol. 51(C), pages 97-112.
    7. Page, Lindsay C. & Scott-Clayton, Judith, 2016. "Improving college access in the United States: Barriers and policy responses," Economics of Education Review, Elsevier, vol. 51(C), pages 4-22.
    8. Andrews, Rodney J. & Imberman, Scott A. & Lovenheim, Michael F., 2020. "Recruiting and supporting low-income, high-achieving students at flagship universities," Economics of Education Review, Elsevier, vol. 74(C).
    9. Charles T. Clotfelter & Steven W. Hemelt & Helen F. Ladd, 2018. "Multifaceted Aid For Low‐Income Students And College Outcomes: Evidence From North Carolina," Economic Inquiry, Western Economic Association International, vol. 56(1), pages 278-303, January.
    10. Benjamin M. Marx & Lesley J. Turner, 2015. "Borrowing Trouble? Student Loans, the Cost of Borrowing, and Implications for the Effectiveness of Need-Based Grant Aid," NBER Working Papers 20850, National Bureau of Economic Research, Inc.
    11. Lovenheim, Michael F. & Owens, Emily G., 2014. "Does federal financial aid affect college enrollment? Evidence from drug offenders and the Higher Education Act of 1998," Journal of Urban Economics, Elsevier, vol. 81(C), pages 1-13.
    12. David L. Sjoquist & John V. Winters, 2016. "The Effects of State Merit Aid Programs on Attendance at Elite Colleges," Southern Economic Journal, John Wiley & Sons, vol. 83(2), pages 527-549, October.
    13. Michael S. Kofoed, 2017. "To Apply or Not to Apply: FAFSA Completion and Financial Aid Gaps," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 1-39, February.
    14. Lindsay C. Page & Jennifer E. Iriti & Danielle J. Lowry & Aaron M. Anthony, 2019. "The Promise of Place-Based Investment in Postsecondary Access and Success: Investigating the Impact of the Pittsburgh Promise," Education Finance and Policy, MIT Press, vol. 14(4), pages 572-600, Fall.
    15. Melguizo, Tatiana & Sanchez, Fabio & Velasco, Tatiana, 2016. "Credit for Low-Income Students and Access to and Academic Performance in Higher Education in Colombia: A Regression Discontinuity Approach," World Development, Elsevier, vol. 80(C), pages 61-77.
    16. Michael S. Kofoed, 2022. "Pell Grants and Labor Supply: Evidence from a Regression Kink," Upjohn Working Papers 22-363, W.E. Upjohn Institute for Employment Research.
    17. Welch, Jilleah G., 2014. "HOPE for community college students: The impact of merit aid on persistence, graduation, and earnings," Economics of Education Review, Elsevier, vol. 43(C), pages 1-20.
    18. Benjamin L. Castleman & Bridget Terry Long, 2016. "Looking beyond Enrollment: The Causal Effect of Need-Based Grants on College Access, Persistence, and Graduation," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1023-1073.
    19. Lauren Schudde & Judith Scott-Clayton, 2016. "Pell Grants as Performance-Based Scholarships? An Examination of Satisfactory Academic Progress Requirements in the Nation’s Largest Need-Based Aid Program," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(8), pages 943-967, December.
    20. Vivian Yuen Ting Liu, 2020. "Is School Out for the Summer? The Impact of Year-Round Pell Grants on Academic and Employment Outcomes of Community College Students," Education Finance and Policy, MIT Press, vol. 15(2), pages 241-269, Spring.

    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ten:wpaper:2015-04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott Holladay (email available below). General contact details of provider: https://edirc.repec.org/data/ecutkus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.